Exhibit 10.1
VICAR OPERATING, INC.
SECOND AMENDMENT
TO
CREDIT AND GUARANTY
AGREEMENT
This SECOND AMENDMENT , dated
as of June 1, 2007 (this “Second Amendment”
) is entered into by and among VICAR OPERATING, INC. , a
Delaware corporation ( “Company” ), VCA
ANTECH, INC., a Delaware corporation (formerly known as
Veterinary Centers of America, Inc., “Holdings”
), CERTAIN SUBSIDIARIES OF COMPANY , as Guarantors (the
“Guarantors ”), the Lenders party hereto,
GOLDMAN SACHS CREDIT PARTNERS L.P. (
“GSCP” ), as Joint Lead Arranger, Joint
Bookrunner and as Sole Syndication Agent (in such capacity,
“Syndication Agent” ) and WELLS FARGO BANK,
N.A. ( “Wells Fargo” ), as Joint Lead
Arranger, Joint Bookrunner, Administrative Agent (together with its
permitted successors in such capacity, “Administrative
Agent” ) and as Collateral Agent (together with its
permitted successor in such capacity, “Collateral
Agent” ) and is made with respect to that certain Credit
and Guaranty Agreement, dated as of May 16, 2005 and amended
pursuant to that First Amendment thereto dated as of
February 17, 2006, (the “Credit Agreement”
) by and among Company, Holdings, the Guarantors, the Lenders party
thereto from time to time, GSCP, as Joint Lead Arranger, Joint
Bookrunner and as Sole Syndication Agent, and Wells Fargo, as Joint
Lead Arranger, Administrative Agent and as Collateral Agent and
Union Bank of California, N.A., as Documentation Agent. Capitalized
terms used herein not otherwise defined herein or otherwise amended
hereby shall have the meanings ascribed thereto in the Credit
Agreement.
RECITALS:
WHEREAS, the Company proposes
incurring indebtedness in an aggregate principal amount of not more
than $160,000,000 to facilitate the acquisition of AHP Holding
Company, Inc., the parent corporation of Healthy Pet Corp. (the
“ AHP Acquisition ”);
WHEREAS, the Credit Parties
have requested that Requisite Lenders agree to amend certain
provisions of the Credit Agreement as provided for herein;
and
WHEREAS, subject to certain
conditions, Requisite Lenders are willing to agree to such
amendment relating to the Credit Agreement.
NOW, THEREFORE , in
consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto agree as
follows:
SECTION I. AMENDMENTS TO CREDIT AGREEMENT
A. Amendments to Section 1: Changes to Existing
Definitions .
(a) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Closing Date Term Loan” in its
entirety and substituting therefor the following:
“ “Closing Date Term
Loan” means a Term Loan made by a Lender to Company
pursuant to Section 2.1(a)(i)(y).”
(b) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Consolidated Capital
Expenditures” in its entirety and substituting therefor
the following:
“ “Consolidated
Capital Expenditures” means, for any period, the
aggregate of the expenditures of Company and its Subsidiaries
during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “
purchase of property and equipment ” or similar items
reflected in the consolidated statement of cash flows of Company
and its Subsidiaries excluding, (i) any acquisition of assets
that constitutes a Permitted Acquisition and (ii) for purposes
of Section 6.8(e) only, any expenditures made by Company
pursuant to Sections 2.13(a) and 2.13(b) hereof;
provided , however , that notwithstanding any of the
foregoing to the contrary, Consolidated Capital Expenditures shall
include expenditures of Company and its Subsidiaries with respect
to assets constituting a fee interest in real property acquired by
Company or its Subsidiaries other than in connection with a
Permitted Acquisition.”
(c) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Permitted Acquisition” in its
entirety and substituting therefor the following:
“ “Permitted
Acquisition” means any acquisition by Company or any of
its Subsidiaries, whether by purchase, merger or otherwise, of
(y) all or substantially all of the assets of, or 51% or more
of the Capital Stock of, or a business line or unit or a division
of, any Person or (z) any additional portion, or all, of the
Capital Stock of any Permitted Partially-Owned Subsidiary;
provided ,
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(i) |
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immediately prior to, and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing or would result therefrom; |
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(ii) |
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immediately after giving affect
to any such Permitted Acquisition, at least $25,000,000 in cash or
undrawn Revolving Commitments shall remain available; |
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(iii) |
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all transactions in connection
therewith shall be consummated, in all material respects, in
accordance with all applicable laws and in conformity with all
applicable Governmental Authorizations; |
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(iv) |
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in the case of the acquisition of
Capital Stock, (i) at least 51% of the Capital Stock (except
for any such Securities in the nature of directors ’
qualifying shares required pursuant to applicable law) acquired or
otherwise issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned by
Company or a Guarantor Subsidiary thereof, (ii) in the case of
acquisitions where Company owns more than 51% but less than 100% of
such Subsidiary, Company shall designate such Subsidiary as a
Permitted Partially-Owned |
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Subsidiary, and (iii) except in the case of a Permitted
Partially-Owned Subsidiary, Company shall have taken, or caused to
be taken, as of the date such Person becomes a Subsidiary of
Company, each of the actions set forth in Sections 5.10 and/or
5.11, as applicable; |
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(v) |
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Any Person or assets so acquired
shall be located exclusively in the United States or Canada; |
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(vi) |
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Holdings and its Subsidiaries
shall be in compliance with the financial covenants set forth in
Section 6.8 on a pro forma basis after giving effect to such
acquisition as of the last day of the Fiscal Quarter most recently
ended (as determined in accordance with Section 6.8(f));
provided , however , that with respect to the
financial covenants set forth in Section 6.8(c), Holdings and
its Subsidiaries shall be in pro forma compliance with the Leverage
Ratio at a level 0.25x lower than those levels otherwise set forth
therein; |
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(vii) |
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Company shall have delivered to
Administrative Agent (A) at least five Business Days prior to
such proposed acquisition, a Compliance Certificate evidencing
compliance with Section 6.8 as required under clause
(vi) above, together with all relevant financial information
with respect to such acquired assets, including, without
limitation, the aggregate consideration for such acquisition and
any other information required to demonstrate compliance with
Section 6.8; provided , however , that Company
shall not be required to comply with the provisions of this clause
(vii) with respect to acquisitions unless the consideration of
such acquisition is greater than $30,000,000; |
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(viii) |
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any Person or assets or division
as acquired in accordance herewith shall be in a business or lines
of business the same as, related, complementary or ancillary to,
the business or lines of business in which Company and/or its
Subsidiaries are engaged as of the Closing Date; and |
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(ix) |
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notwithstanding any of the
foregoing to the contrary, “ Permitted Acquisition
” shall include any acquisition of any assets
constituting a fee interest in real property in connection with
such Permitted Acquisition; provided that an acquisition of
a fee interest in real property “in connection with” a
Permitted Acquisition shall include a fee interest in real property
acquired subsequent to the closing date of such Permitted
Acquisition so long as the Company or its Subsidiary is obligated
as of the closing date of such Permitted Acquisition to purchase
the fee interest on a date certain within one year of the closing
date of such Permitted Acquisition.” |
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(d) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Permitted Partially-Owned
Subsidiary” in its entirety and substituting therefor the
following:
“ “Permitted
Partially-Owned Subsidiary” means (a) those
Subsidiaries of Company listed on Schedule 1.2 existing on the
Closing Date, and (b) those Subsidiaries of Company acquired
or created after the Closing Date, including laboratories and other
associated veterinary businesses, and designated by Company as a
Permitted Partially-Owned Subsidiary by written notice to the
Administrative Agent, provided , that, with respect to
Permitted Partially-Owned Subsidiaries acquired or created after
the Closing Date, (i) Company owns at least 51% of the
outstanding Capital Stock of such Subsidiary, (ii) if the
Permitted Partially-Owned Subsidiary is an animal hospital, the
remaining Capital Stock of such Subsidiary is owned directly or
indirectly, by one or more licensed veterinarians who are actively
involved in the business of such Subsidiary, (iii) Company
shall use its commercially reasonable efforts to cause such
Subsidiary to become a Guarantor Subsidiary, (iv) if Company
fails to obtain a Guaranty from such Subsidiary, then such
Subsidiary shall not own and lease any Material Real Estate Assets,
and (v) Company shall use commercially reasonable efforts to
cause the owner of the remaining Capital Stock of such Subsidiary
to pledge his or her Capital Stock in such Permitted
Partially-Owned Subsidiary in favor of the Collateral Agent for the
benefit of the Secured Parties; provided , further ,
that at no time shall the total portion of Consolidated Adjusted
EBITDA contributed by all Subsidiaries constituting Permitted
Partially-Owned Subsidiaries exceed 20% of Consolidated Adjusted
EBITDA.”
(e) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Term Loan” in its entirety and
substituting therefor the following:
“ “Term
Loan” means a Closing Date Term Loan, a Delayed Draw Term
Loan, a New Term Loan or a Second Amendment Effective Date Term
Loan.”
(f) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Term Loan Commitment” in its
entirety and substituting therefor the following:
“ “Term Loan
Commitment” means the Closing Date Term Loan Commitments,
the Second Amendment Effective Date Term Loan Commitments and the
DDTL Commitments.”
(g) Section 1.1
of the Credit Agreement is hereby amended by deleting the
definition of “Term Loan Note” in its entirety
and substituting therefor the following:
“ “Term Loan
Note” means a promissory note substantially in the form
of Exhibit B-1, as it may be amended, supplemented or
otherwise modified from time to time.”
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B. |
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Amendments to Section 1: New Definitions
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(a) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second
Amendment” means that certain Second Amendment to Credit
and Guaranty Agreement dated as of June [1] , 2007 by and among the
Company, Holdings, the Guarantors and the Lenders and Agents party
thereto.”
(b) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second Amendment
Effective Date” means June [1], 2007.”
(c) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second Amendment
Effective Date Term Loan” means a Term Loan made by a
Lender to Company pursuant to
Section 2.1(a)(i)(z).”
(d) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second Amendment
Effective Date Certificate” means the Second Amendment
Effective Date Certificate substantially in the form of
Exhibit M.”
(e) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second Amendment
Effective Date Term Loan Commitment” means the commitment
of a Lender to make or otherwise fund a Second Amendment Effective
Date Term Loan and “Second Amendment Effective Date Term
Loan Commitments” means such commitments of all Lenders
in the aggregate. The amount of each Lender ’ s Second
Amendment Effective Date Term Loan Commitment, if any, is set forth
on Appendix A-3 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and
conditions hereof. The aggregate amount of the Second Amendment
Effective Date Term Loan Commitments as of the Second Amendment
Effective Date is $160,000,000.”
(f) Section 1.1
of the Credit Agreement is hereby amended by adding the following
new definition in the appropriate alphabetical order:
“ “Second Amendment
Term Loan Maturity Date” means the earlier of
(i) May 16, 2011, and (ii) the date that all Term
Loans shall become due and payable in full hereunder, whether by
acceleration or otherwise.”
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C. |
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Amendments to Section 2 . |
(a) Section 2.1
of the Credit Agreement is hereby amended by deleting subsection
(a)(i) in its entirety and replacing it with the following:
“(i)
(y) Subject to the terms and conditions hereof, each Lender
severally agrees to make, on the Closing Date, a Closing Date Term
Loan to Company in an amount equal to such Lender ’ s
Closing Date Term Loan Commitment. Company may make only one
borrowing under the Closing Date Term Loan Commitment which shall
be on the Closing Date. Any amount borrowed under this
Section 2.1(a)(i)(y) and subsequently repaid or prepaid may
not be reborrowed. Subject to Sections 2.12(a) and 2.13, all
amounts owed hereunder with respect to the Closing Date Term Loans
shall be paid in full no later than the Term Loan Maturity Date.
Each Lender ’ s Closing Date Term Loan Commitment
shall terminate immediately and without further action on the
Closing Date after giving effect to the funding of such Lender
’ s Closing Date Term Loan Commitment on such
date.
(z)
Subject to the terms and conditions hereof, each Lender severally
agrees to make, on the Second Amendment Effective Date, a Second
Amendment Effective Date Term Loan to Company in an amount equal to
such Lender ’ s Second Amendment Effective Date Term
Loan Commitment. Company may make only one borrowing under the
Second Amendment Effective Date Term Loan Commitment which shall be
on the Second Amendment Effective Date. Any amount borrowed under
this Section 2.1(a)(i)(z) and subsequently repaid or prepaid
may not be reborrowed. Subject to Sections 2.12(a) and 2.13,
all amounts owed hereunder with respect to the Second Amendment
Effective Date Term Loans shall be paid in full no later than the
Second Amendment Term Loan Maturity Date. Each Lender
’ s Second Amendment Effective Date Term Loan
Commitment shall terminate immediately and without further action
on the Second Amendment Effective Date after giving effect to the
funding of such Lender ’ s Second Amendment Effective
Date Term Loan Commitment on such date.”
(b) Section 2.1
of the Credit Agreement is hereby amended by adding the following
new subsection (d):
“(d)
Borrowing Mechanics for Second Amendment Effective Date Term
Loans .
(i)
Company shall deliver to Administrative Agent a fully executed
Second Amendment Effective Date Certificate (which shall be deemed
to be a Funding Notice with respect to the Second Amendment
Effective Date Term Loans for all purposes hereof) no later than
three Business Days prior to the Second Amendment Effective Date.
Promptly upon receipt by Administrative Agent of such certificate,
Administrative Agent shall notify each Lender of the proposed
borrowing.
(ii)
Each Lender shall make its Second Amendment Effective Date Term
Loan available to Administrative Agent not later than
12:00 p.m. (New York City time) on the Second Amendment
Effective Date, by wire transfer of same day funds in Dollars, at
the
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Principal
Office designated by Administrative Agent. Upon satisfaction or
waiver of the conditions precedent specified herein, Administrative
Agent shall make the proceeds of the Second Amendment Effective
Date Term Loans available to Company on the Second Amendment
Effective Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative
Agent from Lenders to be credited to the account of Company at the
Principal Office designated by Administrative Agent or to such
other account as may be designated in writing to Administrative
Agent by Company.”
(c) Section 2.5
of the Credit Agreement is hereby amended by adding the following
sentence to the end of the section:
“The
proceeds of the Second Amendment Effective Date Term Loan shall be
applied by Company to consummate a Permitted Acquisition and the
other transactions contemplated by the Second
Amendment.”
(d) Section 2.11
of the Credit Agreement is hereby amended by deleting the first
paragraph and the table therein in their entirety and replacing
them with the following:
The
principal amount of the Term Loans shall be repaid in consecutive
quarterly installments (each, an “Installment” )
in the aggregate amounts set forth below on the last day of each
Fiscal Quarter (each, an “Installment Date” )
commencing June 30, 2007:
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Second Amendment |
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Closing Date Term |
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Effective Date Term |
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Fiscal Quarter Ending |
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Loan Installments |
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Loan Installments |
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June 30,
2007
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$ |
948,264.91 |
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$ |
400,000 |
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September 30,
2007
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$ |
948,264.91 |
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$ |
400,000 |
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December 31,
2007
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$ |
948,264.91 |
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$ |
400,000 |
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March 31,
2008
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$ |
948,264.91 |
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$ |
400,000 |
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June 30,
2008
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$ |
948,264.91 |
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$ |
400,000 |
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September 30,
2008
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$ |
948,264.91 |
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$ |
400,000 |
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December 31,
2008
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$ |
948,264.91 |
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$ |
400,000 |
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March 31,
2009
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$ |
948,264.91 |
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$ |
400,000 |
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June 30,
2009
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$ |
948,264.91 |
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$ |
400,000 |
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September 30,
2009
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$ |
948,264.91 |
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$ |
400,000 |
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December 31,
2009
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$ |
948,264.91 |
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$ |
400,000 |
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March 31,
2010
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$ |
948,264.91 |
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$ |
400,000 |
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June 30,
2010
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$ |
948,264.91 |
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$ |
400,000 |
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September 30,
2010
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$ |
948,264.91 |
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$ |
400,000 |
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December 31,
2010
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$ |
948,264.91 |
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$ |
400,000 |
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March 31,
2011
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$ |
948,264.91 |
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$ |
400,000 |
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Term Loan Maturity
Date
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$ |
356,547,604.65 |
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$ |
153,600,000 |
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(e) Section 2.13
of the Credit Agreement is hereby amended by deleting subsection
(a) in its entirety and replacing it with the following:
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“(a)
Asset Sales . No later than the first Business Day following
the date of receipt by Holdings or any of its Subsidiaries of any
Net Asset Sale Proceeds, Company shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in
Section 2.14(b) in an aggregate amount equal to such Net Asset
Sale Proceeds; provided , (i) so long as no Default or
Event of Default shall have occurred and be continuing, and
(ii) so long as the reinvestment of any such Net
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